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I need to talk about credit card points.

Here's a take so spicy that the entire r/churning subreddit is probably drafting angry Reddit posts as we speak:

Credit card points are a trap for broke people.

Now before you close this email to go defend your precious Amex Gold—hear me out. Because after thinking about it, I think this is something most of us don't want to admit.

Here's how it usually goes:

You see a YouTube video about travel hacking. Some guy flies first class to Tokyo for "free" using points. You think: "I'm literally leaving money on the table."

So you sign up for a Chase Sapphire. Maybe an Amex Gold. You download an app to track your category bonuses. You feel smart.

Then you see "5x points on dining."

Suddenly you're eating out three times a week to "maximize rewards." That home-cooked meal you were planning? Nah. Chipotle counts as dining. So does that $47 sushi lunch. You're earning 5x points, baby.

Here's what nobody tells you: the average credit card interest rate right now is over 20%.

Let's do some quick math.

Say you spend $500 at restaurants this month chasing those 5x points. That's 2,500 points—worth maybe $25 in travel value if you redeem them perfectly.

But you only pay the minimum. You carry $400 of that balance to next month.

At 22% APR, you just paid roughly $7 in interest. For one month. On one category.

Do that across your entire spending for a year while carrying a balance, and those "free" points just cost you hundreds of dollars.

The points aren't the trap. The behavior is.

Let me tell you who's actually winning in the points game: the banks.

Credit card companies aren't charities. They didn't create elaborate rewards programs because they want you to see the Northern Lights for free. They did the math.

Here's what they know:

Most people don't redeem points optimally. That 100,000 point sign-up bonus? Studies show a huge percentage of points expire unused or get redeemed for gift cards at terrible rates. You earned "first class to Paris" and spent it on an Amazon gift card worth half as much.

Rewards increase spending. When you're earning points, you spend more. It's psychology. That "5x on groceries" category makes the $8 fancy cheese feel justified. You weren't going to buy it, but hey—points.

Interest income dwarfs rewards costs. For every person gaming the system perfectly, there are ten people carrying balances and paying 22% interest. The math works out beautifully—for them.

The entire rewards ecosystem is designed around the assumption that most users will slip up. Miss a payment. Carry a balance. Forget to redeem.

And statistically? They're right.

Here's the thing—points aren't always bad. For people who know how to use them, they're genuinely powerful.

So what separates the winners from the trapped?

1. They pay in full. Every. Single. Month.

This is non-negotiable. The moment you carry a balance, you've lost the game. One month of interest can wipe out three months of points.

The people winning at credit cards treat them like debit cards with benefits. The money comes out of their checking account mentally the moment they swipe.

2. They don't change their spending to chase points.

Here's the mindset shift: points should reward spending you were already going to do. Not incentivize new spending.

If you were going to spend $200 on groceries anyway, getting 3x points is free money. If you spent $300 because "I should stock up while earning points"—you just paid $100 for what, 300 extra points? That's like paying a dollar for a nickel.

3. They actually redeem points at maximum value.

The difference between good and great redemptions is huge. Transferring Chase points to Hyatt for a $500/night hotel? That's 2+ cents per point. Redeeming for a statement credit? That's 1 cent per point. Same points, half the value.

The people who win know the transfer partners, the sweet spots, the redemption tricks. They don't let points sit in accounts for years.

4. They track their annual fees ruthlessly.

That $695 Amex Platinum sounds insane until you realize the credits can offset most of it—if you use them. Uber credits. Airline credits. Saks credits.

But if you're not naturally spending in those categories, you're paying $695 for lounge access and vibes. The math has to math.

The core insight here is simple: the difference between a trap and a tool is self-awareness.

Ask yourself honestly:

If you answered yes to any of these, points might be costing you money. Not earning it.

And that's okay. It's not a moral failure. It's just information about which financial tools work for your brain and which don't.

Some people can have one drink. Some people shouldn't drink at all. Credit card points are the same way.

Credit card points aren't inherently good or bad. They're a system designed to profit from human psychology—specifically, the gap between our intentions and our behavior.

For people with the discipline, income stability, and financial awareness to use them correctly, they're genuinely free money. Thousands of dollars in travel. Cashback on spending you'd do anyway. Real value.

For everyone else—and "everyone else" is most people—they're a trap dressed up as a benefit. A system that makes you feel smart while quietly extracting more money than it gives.

The question isn't "are points worth it?" The question is "are points worth it for me?"

Be honest with yourself. The credit card companies already know the answer.

See you tomorrow.

— Alex

Not financial advice. Just what I'm learning and thinking about.